Thursday, December 04, 2008

Google called off its proposed search advertising deal with Yahoo just 3 hours before the U.S. Department of Justice was to file an antitrust complaint aimed at blocking it.

Shortly after the deal, which would have had Yahoo running Google advertisements alongside its own search results was announced in June, Google and Yahoo came under fire from large advertiser groups, which charged that the arrangement would diminish competition and raise online advertising prices.

The chairman of the U.S. Senate's antitrust subcommittee in October urged the DOJ to closely examine the proposed partnership, noting that it could lead to higher advertising prices and create unfair market conditions. Microsoft and other companies lobbied the department to block the proposed deal.